What is Macro Environment ?

Every business has an aim of improving its performance by fundamental and creative strategies. There are certain factors affecting the decision making capabilities of an organization and these factors can not be controlled.

You can refer to the slides given above and the points mentioned in those slides along-with some examples to understand Macro Environment in depth.

2. MACRO ENVIRONMENT • The major external and uncontrollable factors that influence an organization’s decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. • Specific examples of macro environment influences include competitors, changes in interest rates, changes in cultural tastes, disastrous weather, or government regulations.

4. DEMOGRAPHIC ENVIRONMENT • Demography is the study of human populations in term of sizes, density, location, age, gender, race, occupation, and other statistics. The demographic environment is a major interest to marketers because it involves people, and people make up markets.

5. ECONOMIC ENVIRONMENT • The economic environment consist of factors affecting consumers purchasing power and spending patterns both across and within their world markets.

6. NATURAL ENVIRONMENT •The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

7. TECHNOLOGICAL ENVIRONMENT • The technological environment is perhaps the most dramatic force now shaping our destiny. Forces that create new technologies, create new product and market opportunities.

8. POLITICAL ENVIRONMENT • The political environment consist of laws, government agencies, and pressure groups that influence and limit various organizations and individuals in the given society.

9. CULTURAL ENVIRONMENT • The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.

10. CASE STUDY ON RELIANCE INDUSTRIES • Reliance Industries Limited (RIL) is an Indian conglomerate holding company headquartered in Mumbai, Maharashtra, India. The company operates in five major segments: exploration and production, refining and marketing, petrochemicals, retail and telecommunications. • The group is present in many business sectors across India including petrochemicals, construction, communications, energy, health care, science and technology, natural resources, retail, textiles, and logistics. • RIL is the second-largest publicly traded company in India by market capitalization and is the second largest company in India by revenue after the state-run Indian Oil Corporation. The company is ranked No. 99 on the Fortune Global 500 list of the world’s biggest corporations, as of 2013.RIL contributes approximately 14% of India’s total exports.

11. Is Mukesh Ambani falling out with the Narendra Modi government? Mukesh and Reliance Industries Ltd (RIL) have been at the receiving end of a couple of “strong” government decisions — the biggest one being to keep gas price hike in abeyance. UPA-II had set April 1 as the date for the hike, but left it to the next government to take a final decision later. “It was expected that no sooner does Narendra Modi come to power, the hike would be announced. But that has not happened, giving the first indication that all was not well between Mukesh and the government,” said a source in the BJP. Sources also speculate that the government may be buying time before helping RIL. An e-mail sent to RIL late evening did not elicit any response. “It is too short a notice,” said the spokesperson. That has not happened in the first 45 days of Modi’s rule. This is being read as proof of a “rift between RIL and the Modi government”. That Reliance decided to hit back by deferring investments in fresh fields like the R-cluster in KG-D6 Block is also being taken as proof of a “fall from grace’ for RIL and Mukesh Ambani. A second reason, cited by sources in the BJP, for the alleged fallout between Mukesh and the government is linked to the CAG reports on 2G that indicated that RIL had rigged conditions in its favour to bag the 4G contract, and which it used to launder money. There is an AAP angle to this allegation, too. Supreme Court lawyer and AAP member Prashant Bhushan has filed a petition for the cancellation of RIL’s 4G deal. Coming in handy for Bhushan was the Modi government’s decision to bring back black money stashed away abroad in six months, for which the government set up a special investigation team (SIT).

12. The AAP troubleshooter forwarded a loaded letter to SIT on Black Money, alleging that Mukesh Ambani was a common money launderer, who used the 4G contract route to turn black money to white. “Reliance is laundering its ill-gotten profits from KG Basin through Singapore and depositing the same into accounts of Mr. Mukesh Ambani,” Bhushan wrote in his letter to ML Meena, member secretary, SIT on Black Money. “There have been two detailed CAG reports that says RIL is involved in inflation of capital expenditure, over-invoicing and siphoning of money from the KG Basin D6 Block. There is clear indication that such amounts are being laundered and funneled back into Reliance companies,” he said. The latest proof that RIL and the Modi government are not on the same page and that Modi will not go out of his way to smoothen things out for RIL is the $579million fine the government has slapped on RIL for continuous shortfall in KG Basin gas production. Gas price hike deferment led RIL and its other partners in KG-D6 basin Niko Resources and British Petroleum to file arbitration against the government, which many considered as an arm-twisting exercise. Nonetheless, the new government has made it amply clear over the last two months through various announcements that it is not in favour of a sharp rise in gas price.. The oil ministry also slapped an additional penalty of $579 million for natural gas production shortfall from KG-D6 block for the financial year 2013- 14. The penalty in the form of disallowing costs incurred on the field is for missing the target in 2013-14. With this, the total costs disallowed to RIL will increase to $2.375 billion. Another recent document which was passed by oil ministry to the cabinet committee also indicated that RIL should not be allowed new gas price for KG-D6 produce until it is able to meet the shortfall in gas output over the last four years.

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